Primary Market: PART 1

The Primary Market is the part of the financial market where new securities (such as stocks and bonds) are issued and sold for the first me. In simpler terms, it's where companies raise capital by offering their shares or bonds to the public for the first time. The money from these sales goes directly to the company or government issuing the securities. Key Concepts of the Primary Market: 1. Initial Public Offering (IPO): o An IPO is the process through which a private company offers its shares to the public for the first me. This is often seen as a major milestone for a company, allowing it to raise large amounts of capital by selling ownership stakes (shares) to the public. o the company, with the help of investment banks, sets an offer price for the stock, and investors can subscribe to buy shares at that price. 2. Follow-On Public Offering (FPO) or Secondary Offering: o After a company has already gone public via an IPO, it may issue more shares in a follow-on public offering (also called a secondary offering) to raise additional capital. This happens after the initial shares have already been listed on the stock exchange. 3. Private Placements: o A private placement occurs when securities are sold directly to a small group of investors, such as institutional investors or wealthy individuals, instead of being offered to the public. This is typically done to raise capital quickly without going through the lengthy process of a public offering. 4. Rights Issue: o A rights issue is a way for a company to raise capital by giving its existing shareholders the right to purchase additional shares at a discounted price before the shares are offered to the public. This helps the company raise funds while giving current investors a chance to maintain their proportional ownership. read more in next part